Alexander Hamilton played a big part in forming America. His book, The Federalist, swayed many people's opinions about the way that America should be governed. When the Constitution was ratified, George Washington became the first president of the United States. He appointed Alexander Hamilton as the first Secretary of the Treasury. Hamilton built the first budget, started the first taxes and planned the fiscal future of the United States of America.
Alexander Hamilton knew that setting up America's economy would be extremely important. Taxes on importation would be the biggest source of revenue. To make sure that he set things up right the first time he asked for merchants, and business people to send him statistics and general information on trade. This gave him a good overview of how the country was running.
Hamilton drew up many reports and considered many options as Secretary of the Treasury. He was heavily inspired by an 18th century Scottish economist David Hume, who studied the effects and consequences of Scotland's merger with Britain's economy, which was almost entirely mercantile. The situation that the Scots were in at the time was very similar to the position Alexander Hamilton was in. Hume pointed out some strong points in the British economy such as a paper capital. Hume said that wealth in land makes "country gentle men" out of wealthy merchants, however paper capital encourages a more international mentality, and a more diverse economy. Hume also showed some disadvantages, and said that funded debt breeds oppressive taxes, which create giant separations in wealth and class. He said that disadvantages outweighed the advantages, and discouraged this economy.
Hamilton, however, ignored Hume's warnings. He created America's economy around the British model. To make the economy run he needed big investors. Many of the richest citizens believed that he was trying to set up an aristocracy. Hamilton was, however, creating, what he though, would help the people and country as a whole in the long run. He anticipated a strong economy where everyone could benefit.
On January 9, 1790 Alexander Hamilton submitted a report to congress which set up the commercial foundation of the United States. This report met a lot of controversy in congress. James Madison argued about the repayment of the national debt. He said that the original buyers of the Continental Certificates had sold them at the worst point of the revolutionary war, when they were worth the least. If the government paid the holders of the certificates now, they would receive a huge profit from when they bought them. This was unfair to the soldiers and farmers who had spent so much on them originally. For this reason the whole plan was shot down.
Hamilton appealed to the Secretary of State, Thomas Jefferson. Jefferson made a deal with Madison and Hamilton. If Madison got the votes needed to approve Hamilton's plan, than the nation's capital, which was located in New York City, would be moved to a site on the Potomac river. Madison agreed, and Hamilton's plan passed.
Hamilton's success played a big part in forming early America. Without Hamilton weighing all the possibilities, the government and economy wouldn't run as smoothly as it does today. America definitely wouldn't be as strong and dominant in global trade as it is now. Clearly, Hamilton is one of the biggest figures in History. He died in 1804 in a duel against Aaron Burr over personal issues.